We are reaffirming our Outperform recommendation on
Valmont Industries
(
VMI
). The company's fourth-quarter 2011 earnings of $1.83 per share
outpaced the Zacks Consensus Estimate of $1.66. Revenues cruised
25.7% year over year to $752.7 million led by significant growth in
the Irrigation segment.
The Nebraska-based company saw growth across the board in the
fourth quarter. Revenues from its Irrigation and Utility Support
Structures segments shot up 34% and 63% year over year,
respectively.
Valmont makes fabricated metal products, metal and concrete pole
and tower structures and mechanized irrigation systems in the U.S.
and abroad. It competes with
Lindsay Corporation
(
LNN
) and
Thomas and Betts Corp.
(
TNB
) among others.
Valmont is witnessing significant strength in the irrigation
market and an improving demand for utility transmission structure.
The outlook for irrigation equipment is healthy while demand for
Utility Support Structures is expected to rise moving ahead. Recent
order activity and a growing backlog support expectations for a
strong 2012.
We are encouraged to see a pick-up across Valmont's Irrigation
and Coatings segments recently. In the Irrigation unit, improving
North American equipment demand is boosting net farm income.
We also believe acquisitions will spur growth moving forward.
Valmont, in May 2010, bought UK-based industrial engineer Delta
plc. Delta's engineered support structures business and galvanizing
facilities added size and geographic coverage to Valmont's current
businesses.
Going forward, management sees continued strong performance in
2012. Besides a healthy outlook for the Irrigation and Utility
Support Structures division, a continued good performance in the
Coatings segment is expected in 2012.
While Valmont envisions increased sales and profitability in the
Engineered Infrastructure Products segment in 2012, the division is
still operating in an environment of fiscal austerity and measured
government funding for infrastructure projects.
Our recommendation on the stock is in agreement with a
short-term Zacks #1 Rank (Strong Buy).
LINDSAY CORP (
LNN
): Free Stock Analysis Report
THOMAS & BETTS (
TNB
): Free Stock Analysis Report
VALMONT INDS (
VMI
): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research